Connect with us

International Circuit

China’s semiconductor imports continue to contract amid economic headwinds

China’s import volume of integrated circuits (ICs) declined more than 12 per cent in the first eight months of the year, according to official customs data released on Wednesday, as the world’s biggest market for semiconductors faces pressure from economic headwinds and an escalating tech war with the US.

The country imported 369.5 billion IC units from January to August, down 12.8 per cent from the 423.9 billion units shipped in the same period last year, the latest data from the General Administration of Customs shows. That marked a sharp retreat from the 27.2 per cent increase recorded in the same period in 2021.

The value of China’s chip imports from January to August this year rose 2.6 per cent to US$277 billion, up from US$270 billion in the same period last year, signifying that the country is buying more expensive IC products.

China’s factory activity in August contracted amid weakening demand, while power shortages and fresh Covid-19 flare-ups disrupted production, according to the Caixin/Markit manufacturing purchasing managers’ index (PMI) survey, which slid to a lower-than-expected 49.5 in August.

That reading echoed China’s official PMI data released last week by the National Bureau of Statistics, which recorded a contraction for a second consecutive month in August to 49.4, from 49 in July. The 50-point mark separates PMI growth from contraction on a monthly basis.

Semiconductor imports to China started to shrink in the first two months of 2022, which marked the first year-on-year drop since the beginning of 2020, according to official customs data. That eased in May, when China-based companies imported 45.9 billion IC units that month, up from 45.7 billion units in April.

The volume of China’s chip exports from January to August, meanwhile, dropped 9.9 per cent year on year to 186.3 billion. The value of these exports increased 8.7 per cent in the same period.

These trade data could soon reflect the increased pressure faced by China’s semiconductor industry amid escalating tensions between Beijing and Washington, which imposed more restrictions on Chinese access to advanced chip technologies.

The United States government last week banned Nvidia and Advanced Micro Devices from selling advanced chips used for artificial intelligence and high-performance computing work to the world’s second-largest economy.

Those restrictions followed US export controls on technologies for the production of advanced semiconductors and gas turbine engines announced in August by the Bureau of Industry and Security, an agency under the US Department of Commerce.

That intensified Washington’s efforts to boost America’s hi-tech advantage over China, after US President Joe Biden earlier in August signed into law the Chips and Science Act that earmarks nearly US$53 billion in incentives for semiconductor manufacturing on US soil.

Washington also plans to form the so-called Chip 4 Alliance, a partnership that includes South Korea, Taiwan and Japan. Beijing sees this alliance as a plot by the US government to exclude China from global semiconductor supply chains. South China Morning Post

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2022 Communications Today

error: Content is protected !!